Are You Right On Purpose?
Congratulations on being correct! But was it an accident?
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There are few more fulfilling feelings in business than seeing a big strategic decision prove correct. These big moves are few and far between, and they carry with them a lot of risk. So, when it turns out a big bet pays off, it feels great!
It feels so good that we rarely go back and see if we were right for the right reasons.
For example, let’s say we dropped the price of our product and sales took off. That’s great! But, did sales take off because we dropped the price? Or was it that a major competitor went out of business and all of their customers started buying from us? Would we have made the same sales without the discount? Was the discount a mistake, costing us money? Maybe the business succeeded despite our decision, not because of it.
These are awkward questions and we often don’t want to know the answers, so we just avoid asking them. It’s so rare that a company goes back to analyze a big win to make sure it was on purpose that most companies don’t even have a process for doing so! Sure, they analyze their failures (post mortems, etc) but not the successes.
You can see how that might be a problem.
Sometimes leaders will revisit correct decisions, but only with additional information that wasn’t available at the time. I’ve heard many executives tell me about brilliant strategic moves that were really lucky breaks. For example, many amazing companies were built when the iPhone launched and the founders make it seem like they knew it was going to happen. In reality there were YEARS of speculation about when an iPhone might launch, and these founders got lucky that it launched when they needed it (myself included!).
So, how can you make sure you are right for the right reasons?
Before you make a big decision, identify all of the external forces that you believe will shape your market and business. I call these “Forces of Change” and they are things that happen to us, not actions we take. Examples include macro-economics shifts, competitive product launches and changes in how your customers behave. You don’t control those things, but they have a massive impact on your business.
With your Forces of Change in hand, make your decision and write it down! Include how you believe things will change in the future, your hypothesis about how things will play out. Not in great detail, but enough that you can remember later what you were thinking and what you considered in making the decision.
After you enjoy your success, you can review what you wrote and decide if it was luck or on purpose. Did you identify all the Forces of Change, or was there a surprise? Did you consider the right factors in making the decision, or did you miss something? Did the future play out as you expected, or was there a twist?
Being right doesn’t mean everything happens exactly as you expect. Most decisions have uncertainty, and the future is hard to predict. However, if you are being honest you can tell if you had it right or if you missed and got lucky.
Years ago, before we had GPS and mobile phones, I was on my way to dinner and got lost. All I knew was the name of the restaurant and that it was off an exit on the highway. Not knowing which exit, I got off a random exit planning to ask for directions. Amazingly, I accidentally got off the right exit and pulled into the parking lot for the right restaurant. Entirely by luck!
You don’t want to rely on luck like that in running your business, even if it makes you seem like a genius. Success is great, but taking the time to ensure your decisions are the cause of that success is important to make sure it continues.
You never want to fail and not understand why, and the first step is to understand why you succeed.
For more on Making Decisions, see: